MIL will shortly be going into a nursing home and has been approved for the Fair Deal scheme - Her weekly contribution will be around 600 Euro a week and her savings will probably cover close to 3 years of care but certainly no more. If we pay the nursing home costs on her behalf we can then claim 40% relief but the question I have then is if there is a problem with my MIL giving us a "gift" of that money rather then her paying directly herself. At no stage would we come close to the €330K CAT gift limit.
Fair Deal/Nursing Homes Paying Nursing home costs for Mother in Law
- Thread starter GreenV
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Hi GreenV could be totally wrong but can you not claim medical expenses back at only 20%.
I could be totally wrong?
You could be right - I was getting 40% from here. Not sure as just starting to look at this
Nursing home and additional nursing care expenses
This page tells you how to claim relief on nursing home expenses under certain circumstances.
www.revenue.ie
Nursing home expenses
You may claim Income Tax (IT) relief on nursing home expenses paid by you. You can claim this relief as a deduction from your total income if the nursing home provides 24-hour on-site nursing care. This means that the portion of your income which is taxable at your highest rate of tax is reduced. The amount of relief you can claim at 40% or 20% depends on the amount of tax you paid at either rate.T McGibney
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Brendan Burgess
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You can pay nursing home expenses for anyone, does not have to be a relation.
The payer gets marginal tax relief - i.e. 40% in this case. Unlike medical expenses which are at 20%.
No, the beneficiary cannot reimburse the money to the actual payer.
Brendan
The payer gets marginal tax relief - i.e. 40% in this case. Unlike medical expenses which are at 20%.
No, the beneficiary cannot reimburse the money to the actual payer.
Brendan
Yes I get that .. but other than the CAT limit there is nothing from a tax point of view stopping the elderly parent gifting money to a child. How the child spends it is up to them.
Thanks for the replies, to be honest I have no idea what "look with interest" means as surely everything has to be based off law etc. If parents can gift up to €330K to children in their lifetime without tax implications.... can those children not use some of that to fund nursing home care.
I understand the comment on Fair Deal assessment and that money gifted out can still come under the assessment terms and that makes sense.
I understand the comment on Fair Deal assessment and that money gifted out can still come under the assessment terms and that makes sense.
T McGibney
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Anti-tax avoidance legislation. In short, if you pay the bills and your mother in law reimburses you by gift, Revenue can challenge you that your tax relief claim is not genuine and disallow any refund you have received on foot of it, with possible imposition of interest and penalties.
That question is an insult to the intelligence of Revenue staff!
It would have to be over 5yrs earlier.
Gordon Gekko
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As others have stated, it’s at the 40% rate if the person paying the nursing home fees is a higher rate taxapayer.
The mother-in-law cannot fund the costs, either directly, or via the back door. Such an approach is clearly a sham and would be easily discovered by Revenue.
The mother-in-law cannot fund the costs, either directly, or via the back door. Such an approach is clearly a sham and would be easily discovered by Revenue.
Hi there,
My own mum is unfortunately at the stage where she needs NH care. I am just beginning to look at the whole Fair Deal process.
She has her own home, widows state pension and some savings so I know that their value will be calculated for her contribution to her care.
My query is: If I pay her NH portion of the fees I can claim tax relief on the contribution. What happens then when I ultimately come to inherit her home and and savings remaining , am I liable to repay any tax relief received from her estate?
Thanks.
My own mum is unfortunately at the stage where she needs NH care. I am just beginning to look at the whole Fair Deal process.
She has her own home, widows state pension and some savings so I know that their value will be calculated for her contribution to her care.
My query is: If I pay her NH portion of the fees I can claim tax relief on the contribution. What happens then when I ultimately come to inherit her home and and savings remaining , am I liable to repay any tax relief received from her estate?
Thanks.
Yes:
Tax relief on nursing home fees and for dependent relatives
Tax relief is available on fees paid for nursing homes and for dependent relatives. Information on tax credits and how to apply for tax relief.
No. Capital Acquisitions Tax will be your only potential liability here.
T McGibney
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I must confess I can't make head nor tail of your question.
If you pay the nursing home fees and validly claim tax relief on that basis, the tax relief accrues to you and has nothing to do with your mother's finances and therefore won't affect her future estate?
I took it as asking if any tax relief obtained in respect of the payment of the nursing home fees might be clawed back at the time of inheritance?
But I agree that it is phrased confusingly.
Gordon Gekko
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Sorry to hear that. May She Rest In Peace.